White-Evans Service Co., Inc. And Its Alter Ego Amco Elevators, Inc.

National Labor Relations Board - Board Decisions

Jul 31, 1987

285 N.L.R.B. 81 (N.L.R.B. 1987)

WHITE-EVANS SERVICE CO. 81
White-Evans Service Co ., Inc. and its alter ego
Amco Elevators, Inc. and International Union
of Elevator Constructors , AFL-CIO. Case 25-
CA-14922
31 July 1987
DECISION AND ORDER
By CHAIRMAN DOTSON AND MEMBERS
BABSON AND STEPHENS
On 2 December 1983 Administrative Law Judge
Richard H. Beddow issued the attached decision.
The Respondents filed exceptions and a supporting
brief, the Charging Party filed cross-exceptions and
a brief supporting its cross • exceptions and answer-
ing the Respondents' exceptions, and the General
Counsel filed a brief in support of the judge's deci-
sion.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings,' and
conclusions as modified herein2 and to adopt the
recommended Order as modified.3
1. We agree with the judge that the eight bar-
gaining unit employees of Respondent White-Evans
Service (Service) who did not report for work on
the day after Service's collective-bargaining agree-
In affirming the judge's finding that Respondent Amco Elevators is
the alter ego of Respondent White-Evans Service, we note that the pur-
pose in creating an alleged alter ego relationship is a relevant factor in
the analysis See, e g, Advance Electric, 268 NLRB 1001, 1002 (1984),
Fugazy Continental Corp, 265 NLRB 1301, 1302 (1982), enfd. 725 F 2d
1416 (DC Cir 1984) Here, the Respondents' purpose clearly was to
evade White-Evans Service's collective-bargaining responsibilities under
the Act.
2 We affirm the judge's finding that the Respondents' promises of ben-
efits and interrogations of employees violated the Act. However, we do
not agree that the promises and interrogations constitute independent vio-
lations of Sec. 8(a)(1) Both were incident to the Respondents' pattern of
unlawful direct bargaining They are therefore properly subsumed in the
broader 8(a)(5) and (1) violation found by the judge See Superior Sprin-
kler, 227 NLRB 204, 208 (1976), Houston Sheet Metal Contractors Assn.,
147 NLRB 774, 783-784 (1964),
The Union has excepted to the judge's failure .specifically to find that
the Respondents' direct dealing after the collective-bargaining agreement
expired violated the Act. In our view, the Respondents' postagreement
direct dealing was a continuation of the unlawful direct bargaining in
which they engaged before the agreement expired; the cease-and-desist
order that we adopt herein adequately covers both aspects of this illegal
conduct
3 The Union has moved to strike from the Respondents' brief two ref-
erences to matters not properly before the Board in this proceeding One
reference involved the results of the Union's negotiations with another
employer and the other was the characterization of a letter admitted into
evidence as "part of a public bid." Since the results of the negotiations
are not contained in the record and the Respondents' characterization of
the letter is not supported by the record, we grant the Union's motion
In its brief the Union notes that the judge at In . 2 of his decision erro-
neously identified employee James Kirkpatrick as testifying to matters
concerning the rate of industrial injury for elevator constructors This
testimony was in fact given by Philip Kenworthy, the Union's business
manager.
ment expired were constructively discharged in
violation of Section 8(a)(3) and (1). The theory of
the constructive discharges employed here involves
an employee who ,quits after being confronted by
his employer with the Hobson's choice of resigna-
tion or continued employment conditioned on the
relinquishment of rights guaranteed by Section 7 of
the Act. See, e.g., Remodeling By Oltmanns, 263
NLRB 1152, 1162 (1982), enfd. 719T.2d 1420 (8th
Cir. 1983); Superior Sprinkler, above.4
Here, in the 2-month period culminating in the
expiration of the Standard /Agreement, Service's
conduct in carrying out the final steps in its plan to
convert to a nonunion operation clearly delineated
the choice that its employees faced. Service unlaw-
fully laid off mechanics Wands and Kirkpatrick,
the two most active and outspoken union adherents
in the unit, and subsequently failed to recall them
despite its expressed interest in hiring additional
mechanics. Meanwhile, at the same time that Serv-
ice was assertedly seeking to negotiate in good
faith with the Union, it engaged in a pattern of
direct bargaining with the employees, both individ-
ually and in group meetings, in obvious derogation
of the Union's status as the employees' exclusive
bargaining representative. At these sessions Service
demonstrated its intention to institute substantial
changes in terms and conditions of employment as
soon as ,the contract period ended, and it attempted
to convince the employees to continue working
under these unilaterally imposed conditions. In ad-
dition, various statements were made in the course
of this direct bargaining that further indicated
Service's intention to put an end to the employees'
union representation when the agreement expired.5
And, on the day the contract expired, Service, as it
had done previously, in, bargaining individually
with employees, referred to the Company's emer-
gence as a "new organization," making a "new
start," now set to occur on the next day. Taking
account of the circumstances above, Service clear-
ly conveyed to the unit employees that they each
had a choice at the time the agreement expired:
either continue working on the condition that they
Q Cf, e.g, Lyman Steel Co., 249 NLRB 296 (1980), and Crystal Prince-
ton Refining Co, 222 NLRB 1068 (1976), applying the different construc-
tive discharge theory under which an employer violates Sec 8(a)(3) and
(1) of the Act by imposing intolerable working conditions on an employ-
ee or otherwise harassing him because of his union activity and thereby
forcing him to quit.
s For example, Service told one employee that it would institute a
"merit shop," i.e., a nonunion shop, when its agreement with the Union
expired In another instance, Service told an employee that it had a
drawerful of applicants willing to work nonunion in response to the em-
ployee's statement that the unit employees would not work without union
representation. At one of the group negotiation meetings, Service assured
employees that if they incurred fines for working nonunion the fines
could be taken care of if the Company returned to a union-shop oper-
ation at a future time
285 NLRB No. 13
82 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
relinquish their right to bargain collectively
through their chosen representative, and their right
to terms and conditions of employment thus deter-
mined, or quit. We find Service's animus readily in-
ferable from the conduct above, and further sup-
ported by the immediate imposition of unilateral
changes and the secret transfer of bargaining unit
work to Respondent Amco Elevators (Amco), the
nonunion alter ego, when the contract expired.
Thus, the employees who refused to report for
work in the face of the dilemma created by Service
were constructively discharged in violation of Sec-
tion 8(a)(3) and (1).6 Superior Sprinkler, above; Co-
lumbia Engineers International, 249 NLRB 1023
(1980). See also Blue Cab Co., 156 NLRB 489
(1965), enfd. 373 F.2d 661 (D.C. Cir. 1967).
We do not agree with the judge, however, that
employee Jack Kinz was similarly the subject of a
constructive discharge. Kinz decided to leave Serv-
ice's employ for another job at least 3 weeks prior
to the expiration of the agreement, and he resigned
in fact 8 days before it expired. Thus, while he was
approached by Service in incidents of direct bar-
gaining and while he resigned because of his "im-
pression" that Service intended to institute unilater-
al changes and to terminate the employees' union
representation at the end of the contractual term,
he was not confronted with the dilemma of either
quitting or forgoing union representation at the
time he left. Although resigning in the face of such
a choice is one thing, "quitting in anticipation that
such may take place later on is an entirely different
matter." Marquis Elevator Co., 217 NLRB 461
(1975). Kinz left before the contract expired be-
cause of the availability of other employment, an-
ticipating that he would face the choice that subse-
quently confronted other unit employees. As such,
his resignation was premature, not a constructive
discharge, and not a violation of Sec. 8(a)(3) and
(1). Marquis Elevator Co., above.
2. The Union has excepted to the judge's failure
to identify the appropriate unit for bargaining in
conjunction with his recommended Order that the
6 One unit employee did report for work on the day after the agree-
ment expired The judge included this employee among those he found
had been constructively discharged We see no issue of constructive dis-
charge with regard to this employee since no quit was involved The
judge identified him as Franklin Cox, the record, however, makes clear
that it was employee Steven Shepard Accordingly, we will delete She-
pard's name from the list in the judge's recommended Order of those
who were constructively discharged
While we do not find a constructive discharge as to employee Shepard,
we note that confronting an employee with the choice of forgoing his job
or forgoing union representation is an unfair labor practice notwithstand-
ing the employee's decision to keep his job and surrender his statutory
right to representation by the chosen bargaining unit representative Be-
cause our cease-and-desist order already bars the Respondents from re-
quinng abandonment of union representation , however, there is no need
to find a separate violation as to Shepard
Respondents bargain with the Union. This excep-
tion has merit and we will correct the judge's ap-
parent oversight in this matter.
In 1980 Service was created as a subsidiary of
White-Evans Manufacturers to operate exclusively
in the service and repair of elevators. From 1980
until 1982 White-Evans Manufacturers manufac-
tured elevators; Amco, a nonunion operation, in-
stalled them; and Service performed elevator serv-
ice and repair. Pursuant to its purpose, Service em-
ployed service and repair workers only.
On 2 March 1980 Service signed a short-form
adoption agreement with the Union binding it to
the terms of the Standard Agreement set to expire
8 July 1982. The recognition clauses of both the
Standard Agreement and the adoption agreement
state in virtually identical language that the Union
is the bargaining representative of the installation
employees and the service and repair employees of
the signing employer. There is no evidence in the
record bearing directly on the parties' specific in-
tentions at this time concerning the scope of the
bargaining unit covered by the adoption agree-
ment. The record does clearly show, however, that
Service at no time employed installation workers
and, as stated above, that its sole function was ele-
vator service and repair. On 9 July 1982, after the
agreement expired, the service and repair work of
Service was transferred to Amco. Thereafter
Amco employed service and repair workers on a
nonunion basis in addition to the installation em-
ployees it already had.
We have affirmed the judge's finding that Amco
is the alter ego of Service and responsible for the
latter's bargaining obligations. We note specifically
that Amco's alter ego status stems, inter alia, from
its performance of the service and repair work for-
merly done by Service, and not from the perform-
ance of installation work. With regard to the ap-
propriate unit for bargaining pursuant to a finding
of alter ego, the Board has looked to the voluntary
agreement of the parties concerning the nature and
scope of the bargaining unit. See, e.g., Samuel
Kosoff & Sons, 269 NLRB 424, 428-429 (1984); Ha-
geman Underground Construction, 253 NLRB 60, 70
at fn. 12 (1980); see also Carpenters Local 1846 v.
Pratt-Farnsworth, 690 F.2d 489, 509 (5th Cir. 1982),
cert. denied 464 U.S. 932 (1983). The Union re-
quests that we identify the appropriate bargaining
unit in accordance with the recognition language
of the Standard Agreement and the 1980 short-
form adoption agreement signed by Service. In
effect, the Union would include in the unit Amco's
installation employees. We disagree.
Although the recognition clause of a collective-
bargaining contract may provide an accurate re-
WHITE-EVANS SERVICE CO
flection of the parties' agreement as to the unit for
bargaining , the clause by itself is not necessarily
conclusive , and it is not dispositive in this particu-
lar case , Notwithstanding that the recognition
clause in the 1980 adoption agreement included in-
stallation workers as well as service and repair em-
ployees, the evidence establishes that Service had
no employees performing installation work in its
employ when the agreement was executed or at
any time thereafter . Indeed , Service was created to
engage exclusively in service and repair work and
to that end it employed workers for service and
repair only . Then, as now , all installation work was
performed by the unrepresented employees of
Amco. Consequently , it is fair to infer that installa-
tion workers were not considered by Service and
the Union to be part of the bargaining unit. Ac-
cordingly , we find that the bargaining unit covered
by the parties ' 1980 agreement consisted of em-
ployees engaged in service and repair work. It was
the transfer of this bargaining unit work to Amco
that established Amco's bargaining obligation.
Thus, we conclude that the employees of Respond-
ents Service and Amco performing elevator service
and repair work are the appropriate bargaining unit
for the remedial purposes of this case , and we will
amend the judge 's Conclusions of Law and recom-
mended Order accordingly.?
AMENDED CONCLUSIONS OF LAW
1. Delete Conclusion of Law 6 and renumber the
subsequent Conclusions of Law accordingly.
2. In the final Conclusion of Law , add the fol-
lowing:
"The appropriate bargaining unit is:
All elevator constructor mechanics and help-
ers employed by Respondents White-Evans
Service Co., Inc. and Amco Elevators, Inc.,
who are engaged in the repair , maintenance,
and servicing of all equipment referred to in
Article IV, paragraph 2 and Article IV(A) of
the Standard Agreement between the National
Elevator Industry, Inc. and The International
Union of Elevator Constructors , effective 9
July 1977 to 8 July 1982."
AMENDED REMEDY
In the first sentence of the second paragraph of
the judge's recommended remedy, before the word
"employees," delete the word "all" and insert the
word "certain" in its place.
7 We also note that the addition of Amco's installation employees to
the bargaining unit would raise an issue of accretion See, e g, Ogle Pro-
tection Service, 183 NLRB 682, 688-689 (1970), enfd 444 F 2d 502 (6th
Cir 1971) No such question concerning representation has been litigated
in this proceeding, and thus it is not before us
83
Interest on backpay shall be computed as pre-
scribed in New Horizons for the Retarded."
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondents, White-Evans Service Co., and its alter
ego Amco Elevators, Inc., Indianapolis, Indiana,
their officers, agents, successors, and assigns, shall
take the action set forth in the Order as modified.
1. Delete paragraph 1(f) and reletter the subse-
quent paragraphs accordingly.
2. At the end of paragraph 2(a), add the follow-
ing:
"The appropriate bargaining unit is:
All elevator constructor mechanics and help-
ers employed by Respondents White-Evans
Service Co., Inc. and Amco Elevators, Inc.,
who are engaged in the repair, maintenance,
and servicing of all equipment referred to in
Article IV, paragraph 2 and Article IV(A) of
the Standard Agreement between the National
Elevator Industry, Inc. and The International
Union of Elevator Constructors, effective 9
July 1977 to 8 July 1982."
3. Delete the name "Jack C. Kinz" from para-
graph 2(b) and the name "Steven L. Shepard"
from paragraph 2(c).
4. Substitute the attached notice for that of the
administrative law judge.
8 In accordance with our decision in New Horizons for the Retarded,
283 NLRB 1173 (1987), interest will be computed at the "short-term Fed-
eral rate" for the underpayment of taxes as set out in the 1986 amend-
ment to 26 U S C § 6621 Interest on amounts accrued pnor to 1 January
1987 shall be computed in accordance with Florida Steel Corp, 231
NLRB 651 (1977)
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT bypass International Union of Ele-
vator Constructors, AFL-CIO by bargaining di-
rectly with individual employees in the bargaining
unit or by changing your terms and conditions of
employment without prior consultation with the
Union.
84 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
WE WILL NOT discharge any employee for en-
gaging in union activities.
WE WILL NOT in any other manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL, on request, bargain with the Union
and put in writing and sign any agreement reached
on terms and conditions of employment for our
employees in the bargaining unit. The bargaining
unit is:
All elevator constructor mechanics and help-
ers employed by White-Evans Service Co.,
Inc. and Amco Elevators, Inc., who are en-
gaged in the repair, maintenance, and servicing
of all equipment referred to in Article IV,
paragraph 2 and Article IV(A) of the Standard
Agreement between the National Elevator In-
dustry, Inc. and The International Union of
Elevator Constructors, effective 9 July 1977 to
8 July 1982.
WE WILL revoke and cease to give effect to the
changes we unilaterally instituted, except in such
particulars as the Union may request that a particu-
lar change not be revoked, and WE WILL restore
and place in effect all terms and conditions of the
contract in effect on 8 July 1982.
WE WILL make all payments to the pension, wel-
fare, and educational funds on behalf of those em-
ployees in the unit for whom we previously made
contributions, and for whom such contributions
would have continued had we not ceased to
comply with the contract.
WE WILL make whole our employees for wages
and benefits they would have earned if they had
not been unlawfully terminated.
WE WILL offer W. Wallace Carson, Raymond
Haase, James Kirkpatrick Jr., Brian Stuard, Wil-
liam Wands, and Daniel C. Warren immediate and
full reinstatement to their former jobs or, if those
jobs no longer exist, to substantially equivalent po-
sitions, without prejudice to their seniority or any
other rights or privileges previously enjoyed, and
WE WILL make them whole for any loss of pay and
other benefits suffered by them as a result of the
discrimination practiced against them, less any net
interim earnings, plus interest.
WE WILL remove from our files any reference to
the employees' terminations and WE WILL notify
them in writing that this has been done and that
evidence of the unlawful terminations will not be
used as a basis for future personnel actions against
them.
WHITE-EVANS SERVICE CO., INC.
AND ITS ALTER EGO AMCO ELEVA-
TORS, INC.
Ann Elizabeth Rybolt, Esq., for the General Counsel.
S. Doughlas Trolson, of Indianapolis, Indiana, for the Re-
spondent.
Brian A. Powers, Esq., of Washington, DC, for the Charg-
ing Party.
DECISION
STATEMENT OF THE CASE
RICHARD H. BEDDOW JR., Administrative Law Judge.
This matter was heard in Indianapolis, Indiana, on
March 7 and 8 and April 25 through 29, 1983. Subse-
quently, briefs were filed by all parties The proceeding
is based on a charge filed October 6, 1982, as subsequent-
ly amended, by the International Union of Elevator Con-
structors, AFL-CIO. The Regional Director's complaint,
issued November 19, 1982, 1 alleges that Respondents
White Evans Service Co, Inc. and Amco Elevators,
Inc., both of Indianapolis, Indiana, are alter egos and a
single employer within the meaning of the National
Labor Relations Act and that Respondents violated Sec-
tions 8(a)(1), (3), and (5) and Section 8(d) of the Act by
interrogating employees, promising and giving benefits to
encourage abandonment of union support and member-
ship, discharging or otherwise terminating certain em-
ployees because of their union support and membership,
bypassing the Union and dealing directly with its em-
ployees, transferring unit work to the alter ego, and by
failing and refusing to bargain collectively and in good
faith with the Union.
Upon a review of the entire record in this case and
from my observation of the witnesses and their demean-
or, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent White-Evans Service has provided serv-
ices in its business operations valued in excess of $50,000
for other enterprises in Indiana, each of which is directly
engaged in interstate commerce, and I conclude that it is
an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act. As shown below,
Respondent Amco Elevators is an enterprise affiliated
with White-Evans Service. The Union is a labor organi-
zation within the meaning of Section 2(5) of the Act.
II. BACKGROUND
Historically, employers in the elevator industry who
were signatory to a collective-bargaining agreement had
been signatory to the so-called Standard Agreement. The
Standard Agreement is negotiated on behalf of the entire
elevator industry by the National Elevator Industry, Inc.
(NEII), a multiemployer association. The agreement
reached between representatives of NEII and the Union
became the so-called Standard Agreement. Members of
NEII were automatically signatory to the collective-bar-
gaining agreement by virtue of having assigned their bar-
gaining authority to NEII Independent contractors, not
I All following dates are in 1982, unless otherwise indicated
WHITE-EVANS SERVICE CO. 85
members of NEIL either specifically executing an adop-
tion agreement or were left with no collective-bargaining
agreement. To the belief of most witnesses, the Union
historically was not known to have negotiated or
reached agreement with any individual employer for an
agreement that differed from the Standard Agreement,
except for provisions in _the Standard Agreement that al-
lowed a local option agreement. In the past, such local
agreements were negotiated with contractors in a local
area and applied to all contractors in that area. Up until
1982, the provision for a local option agreement was not
known generally to have been applied to allow a con-
tractor to negotiate an individual agreement that differed
from the agreement applicable to the other contractors in
the area. It appears, however, that on one occasion an
individual agreement was initially negotiated with the
Westinghouse Company for the Washington, D.C. area
and that it then was applied to other employers in that
area. It also appears that as part of the overall negotia-
tions relative to the expiration of collective-bargaining
agreement in July 1982, the Union in fact did conduct
negotiations with three other independent employers. (At
the time of the hearing, an agreement in one case ap-
peared to be feasible of completion).
White-Evans Elevator Company was a corporation in-
volved in all phases of the elevator business: manufactur-
ing, installation, and service and repairs. From at least
1946 until 1977, it had a collective-bargaining agreement
with the Union that covered all employees engaged in
the installation, repair, and maintenance of elevators. The
last agreement entered into by White-Evans Elevator
was a 5-year agreement, which ran from July 9, 1977,
until July 8, 1982.
In the fall of 1977, Donald Applegate and Burt
Spaethe purchased the assets of White-Evans Elevator
and changed the name to White-Evans Manufacturing. A
primary reason for the change in the name was an at-
tempt to limit the liability of the newly purchased com-
pany for products that had been previously manufac-
tured by White-Evans Elevator Company. The employ-
ees, customers, method of operation, and business pur-
pose remained unchanged.
Amco Elevators, Inc. was established in June 1965, by
Applegate who operated the Company as a sole propri-
etorship until its incorporation in 1974. From then until
July 1981, Applegate was the president of Amco Eleva-
tor and its sole owner. Since August' 1982, Burt Spaethe
has owned a 20-percent interest in Amco. Amco was sig-
natory to a contract with the IUEC between 1965 and
1967, but since that time has been operated on a non-
union basis. Until 1980, the Company performed both in-
stallation and service work on elevators.
White-Evans Manufacturers was a full service compa-
ny engaged in manufacturing , installation, and repair and
service until 1980, when a corporate reorganization oc-
curred that resulted in the creation of a wholly owned
subsidiary called White-Evans Service Co. This new
company was created in order to specialize in service
and repair, and both Manufacturers and Amco trans-
ferred then-existing service contracts to White-Evans
Service. Thereafter, from 1980 until 1982, White-Evans
Manufacturers handled elevator manufacturing, Amco
installed them, and White-Evans Service handled service
and repair. As noted, Donald Applegate had been
Amco's sole owner and he owned 80 percent of the
stock of White-Evans Manufacturers, which, in turn, was
sole owner of White-Evans Service.
On April 1, 1982, Amco purchased White-Evans Man-
ufacturers and merged it into Amco. Although Manufac-
turers ceased to exist as a separate company, White-
Evans Service continued as a wholly owned subsidiary
of Amco. In addition to his ownership role, Donald Ap-
plegate has been president of both Amco and White-
Evans Service since August 1982. He also is on each
one's board of directors along with his son, Marcus Ap-
plegate, 'and Burt Spaethe. Steven Stuard has been vice
president of White-Evans Service since he was promoted
from his position as service manager with the inception
of White-Evans Manufacturers in 1977. Michael Yager
was president and principal managing officer in charge
of the construction and service departments and manager
of the financial affairs of the corporation. Spaethe was in
charge of the latter's manufacturing operation. In 1980,
when White-Evans Service was formed, Yager was its
president and chief operating officer.
As noted above, in 1979, prior to the time White-
Evans Service was established through the consolidation
of the service division of Amco and White-Evans Manu-
facturers, the Union represented only the employees of
the latter. The purpose of the consolidation was to elimi-
nate duplication of overhead and other inefficiencies, and
two plans of accomplishing the planned consolidation
were extensively discussed. One plan, proposed by Ap-
plegate, was that Amco would purchase the service divi-
sion of White-Evans Manufacturers and operate the con-
solidated service business from Amco's Zionsville office.
The other plan, proposed by Yager, was that White-
Evans Manufacturers would purchase Amco's service
business, with the combined service business to be oper-
ated out of White-Evans Manufacturers' Indianapolis fa-
cility. Yager testified that Applegate, was adamant that
the operation should be nonunion. Yager argued that the
union employees of White-Evans Manufacturers would
not agree to go to work for anonunion company, that
several qualified service mechanics would be lost, and
that some of the customers of White-Evans Manufactur-
ers might have objections to having their service work
performed by nonunion employees and good customers
could be lost. Yager also believed that it would be more
economical and profitable for White-Evans Manufactur-
ers to purchase the service division of Amco because
White-Evans Manufacturers; already had the clerical and
administrative personnel and the physical office capacity
to accommodate the combined operations, whereas
Amco did not. Yager also believed that White-Evans
Manufacturers' downtown Indianapolis location would
make a more efficient base of operations than Amco's
suburban Zionsville location. Applegate noted that the
union contract had only 2 more years to run and agreed
to go along with Yager's plan through the creation of a
new entity, White-Evans Service.
The new company was formed and Yager entered into
a short-form adoption agreement with the Union dated
86 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
March 3, 1980, by whose terms White-Evans Service
agreed to be bound by the Standard Agreement that ex-
pired July 8, 1982. The service employees who trans-
ferred from Amco became employees of White-Evans
Service and became union members.
Until July 1981, Amco was operated by Applegate
from its Zionsville, Indiana office. Yager ran both White-
Evans Manufacturers and White-Evans Service from the
Indianapolis facility, which both companies shared.
While Yager was on vacation during that month, Apple-
gate reviewed the books and records of the two corpora-
tions, and discovered financial irregularities. Yager, who
had been married to Applegate's niece until their divorce
the previous year, resigned on request. Applegate then
resigned his post as president and director of Amco and
assumed the duties of president of both White-Evans
Manufacturers and White-Evans Service. Marcus Apple-
gate assumed the duties of president of Amco.
II. THE ALLEGED UNFAIR LABOR PRACTICES
During the spring of 1982 Respondent regularly em-
ployed seven service mechanics-William Wands, James
Kirkpatrick Jr., Jack Kinz, W. Wallace Carson, Ray-
mond Haase, Sidney Gaither and Harry Gehrich, four
repair mechanics-Don Rowland, Richard Gehrich,
Franklin Cox, and Dan Warren, and four repair mechan-
ic helpers-Steve Shepard, James King, Frank Farris,
and Brian Stuard. Two other mechanics were hired in
mid-March and worked for a few weeks. Steven Stuard
supervised the day-to-day operations and one nonunit
employee, who served as office manager.
William Wands, an elevator mechanic since 1951, start-
ed working for White-Evans Elevator in 1962 and
worked continuously since 1968 until he was laid off in
April 1982. He had never been disciplined or given a
written reprimand for any reason during his tenure with
the Company. James Kirkpatrick Jr. had 25 years in the
industry and had worked for the Company continuously,
without layoff, since 1970. Kirkpatrick had one written
reprimand dated February 5, 1982. Kirkpatrick had
worked at Amco for Applegate but left in 1967 when
that company failed to agree to a new union contract.
Applegate also knew that Wands and Kirkpatrick were
both strong union suporters and Yager testified that at
the time of the merger of the two service divisions, Ap-
plegate said he knew those two would never go along
with anything, that they could be troublemakers, and
that they were always checking with the business agent
and causing problems. Between 1952 through 1964,
Wands occupied various local union offices including
member of the executive board, vice president, and presi-
dent. Both he and Kirkpatrick had also been part of the
union negotiating team that had negotiated various local-
option agreements. Kirkpatrick also has held various of-
fices in the Local since the early 1960s including member
of executive board, treasurer, and, for the past 11 years,
recording secretary.
Steven Stuard started with White-Evans Elevator in
1973 as an elevator mechanic and was promoted to serv-
ice manager when White-Evans Service was formed. He
also was a member of the local union from 1969 until he
withdrew from active status in 1979. He was a member
of the union executive board during the mid-70's and
was generally acquainted with the union positions of
Wands, Kirkpatrick, and other members.
When White-Evans Service was established and the
service routes consolidated, Applegate sought to have
Yager change a union work rule that required 1 hour per
unit, per stop. This work rule had been negotiated by the
Local Option Committee at a time that Wands and Kirk-
patrick were members of that committee and the rule
had been adhered to by employers bound to the union
contract since the early 1960s; however, it had never
been reduced to a written agreement Yager issued a di-
rective to the employees reducing most unit stops to 45
minutes. Wands and Kirkpatrick strenuously objected
and contacted the union business manager, Philip Ken-
worthy, who supported their position. The dispute con-
tinued with Respondent filing a lawsuit against the
Union and with Wands and Kirkpatrick continuing to
observe the old practice. A settlement was reached in
September 1981, and the Union abandoned its position.
Yager testified that Respondent chose the lawsuit over
disciplinary action to avoid losing two good employees
over the situation. During this period of time Stuard
threatened Wands and Kirkpatrick with discipline but
did not follow through.
A number of other disputes occurred between Stuard
and Wands and Kirkpatrick (as well as other mechanics
on occasion) over work practices and terms of the col-
lective-bargaining agreement, which involved the classi-
fication of work as "repair" that generally required a
two-man team, or "maintenance" that could be done by
a single employee The agreement provided that repair
work may be performed by a single man where "no
factor of safety is involved" and some disputes involved
safety consideration, especially as they related to control
of older elevators that were being worked on.2 Addition-
al disputes occurred involving the taking of calls for
weekend work, out-of-town lunch pay, and cleanliness of
elevator shafts and, in apparent response to their frequent
attempts to relate work practices to terms of the collec-
tive-bargaining agreement or other understandings,
Stuard began to sometimes refer to Wands and Kirkpat-
rick as "assistant BA's [business agents]."
On February 1, Kirkpatrick left work when a snow
emergency was declared. He told the office manager,
who apparently thought he was joking and did not relay
the information to Stuarn The next day Stuard accused
Kirkpatrick of leaving without telling anyone. He then
told Kirkpatrick they were never going to see eye to
eye, that he should look for another job, and that he was
being given 2 weeks' notice. On February 10 Stuard,
Kirkpatrick, and Business Agent Kenworthy met to dis-
cuss the pending discharge. Stuard retracted it but criti-
cized Kirkpatrick for having told coworkers that he was
being fired as it put Stuard "in a barrel" and caused him
embarrassment because he retracted the discharge.
Stuard then handed Kirkpatrick a letter dated February
2 Kirkpatrick testified that elevator constructors had the highest rate of
Injury outside of the fire department and that within the past 20 years
two elevator constructors have been killed in accidents in the Indianapo-
lis area
WHITE-EVANS SERVICE CO.
5, which reprimanded him for unsatisfactory cleanliness
of his accounts, for his challenges of callbacks, and for
his failure to work on February 1, and placed him on
"probation."
On another occasion during early 1982, Stuard repri-
manded all the assembled employees for failing to accept
an emergency repair call during the night. He told them
he made the repairs himself and questioned whether
anyone cared to file charges against him for performing
unit work. Wands replied they probably would and
Stuard responded "if you don't like it you can quit."
Also during early 1982, Respondent issued a memo to
all mechanics criticizing the cleanliness of elevators and
began a specific campaign to improve the condition of
all routes. During this campaign, helpers were made
available to service mechanics, routes were cleaned up
(especially car tops and pits), and a memo was issued in
recognizing the success of the campaign. Subsequently,
however, some service routes including those of Wands
and Kirkpatrick again displayed indications of lack of
cleaning that included rags, oil, and dirt on car tops and
paper and dirt in elevator pits. Some mechanics testified
that they normally gave preference to operational and
safety maintenance on service calls and would postpone
cleaning chores that could not be accomplished in the
normal 45 minutes allocated for a stop, on monthly, and
especially bimonthly, service contracts.
In April, Stuard decided to disband two repair teams,
to lay off both Wands and Kbkpatrick, to switch repair
mechanics Don Rowland and Richard Gehrich to
Wands' and Kirkpatrick's service routes, and to lay off
the two helpers, Frank Farris and Brian Stuard (Supervi-
sor Stuard's brother), who worked the repair teams. The
four were laid off April 30. Stuard testified he made the
decision without consultation with Applegate or Spaethe,
although he admitted he possibly discussed his choice
with them before the actual date of layoff. Stuard stated
that the layoffs were made because of his observation of
a decline in repair order over the previous 4 to 6 weeks.
Wands and Kirkpatrick were selected because of poor
work performance based on his evaluation of the work
they did (most specifically cleanliness), their effort
toward their jobs, and the retention of customer service
contracts by their accounts. Farris and Brian ' Stuard
were selected because the mechanics they were assigned
to help were to be transferred from their repair function
to the service routes previously covered by Wands and
Kirkpatrick and the two repair teams were disbanded be-
cause of the asserted decline in repair orders.
Mechanic Dan Warren testified that on April 30, as he
was leaving, Stuard asked to see Warren's helper, Brian
Stuard, and said he was going to have to lay him off.
Warren said, "I thought we had a bunch of work?"
Stuard replied, "We do, but the old man says, Kirkpat-
rick and Wands3 got to go, you'll be staying on repair."
Warren asked, "If I'm staying, why can't Brian stay?"
Stuard replied, "Well, it'll be better for him in this cir-
cumstance , if he was to get laid off." Although Stuard
3 The transcript reads "Kirkpatrick and on the them's" and the obvious
phonetic mistake for Wands in transcription is corrected.
87
recalled the conversation, he denied he said "the old man
had said that Wands and Kirkpatrick had to go."
Respondent's payroll records indicate that two repair
mechanics were hired the week beginning March 26,
1982, during the period Stuard said he observed a de-
cline in work. Respondent's financial records show a de-
crease in income from repair work in the first quarter of
1982 of 24 percent as compared with the last quarter of
1981, however, there is no indication that Stuard was
aware of or relied on this information and it also was
noted that repair work may be covered under various
types of service contracts and therefore the amount of
work would not necessarily be reflected in financial
records. Moreover, repair income figure comparisons for
the same quarters the previous year show that repair
income declined 44 percent, however, no employees
were laid off. Two repair employees confirmed that the
pile of repair tickets on the office clipboard got thinner
in 1982, and that the people hired in March were let go
a€ter'a few weeks. It also was indicated that while some
emergency repairs are handled immediately, others can
be elective, or completed between 2 and 6 months of
their initial order. Some repairs recommended by service
mechanics were not scheduled and assignment of repairs
was according to Stuard's overall discretion. As noted,
Stuard also would classify some work as regular service
work although some service mechanics believed it to be
repair-type work.
A number of witnesses testified regarding the relative
work abilities and habits of Wands and Kirkpatrick.
Stuard and several employees noted examples of occa-
sions where they felt the accounts of Wands and Kirk-
patrick had problems, were poorly maintained, and were
dirtier than routes of other mechanics. Several other me-
chanics that had an opportunity to observe gave their
opinions that the routes (which involved over a hundred
units for between 50 and 60 accounts visitations a
month), were no less well maintained than most others
and circumstances were described that tended to indicate
that many of the alleged deficiencies should not be at-
tributed to Wands and Kirkpatrick.
Stuard recalled a few specific instances where ac-
counts served by Wands and Kirkpatrick had been can-
celed, however, at the time of their layoff he did not
make and review a comparison of specific records of the
various mechanics. It also was shown that contract can-
cellations are common and that competitive practices in
the industry frequently lead to changes between compa-
nies that bear no relation to the skills of the mechanic.
Warren further testified that on May 17, Stuard
"jumped" on him for not taking more trouble calls the
previous day. Warren said he was only one man and
could do only so much and suggested they needed more
help. Stuard then asked several of the employees present
if they knew of any available service mechanics. When
mechanic Rae Haase answered "Wands and Kirkpat-
rick," Stuard replied that he did not need anymore busi-
ness agents around. Shortly thereafter, on May 23, Rich-
ard Gehrich quit and Warren also was transferred from
repair to service work.
88 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Sometime between mid-May and June 1, Stuard con-
tacted Business Agent Kenworthy and asked who was
on the hiring list for mechanics and helpers. Kenworthy
gave him six names , including Wands and Kirkpatrick.
Stuard replied he did not want any of them and he did
not offer recall to either employee nor did he hire
anyone else at that time. He continued his efforts to find
other employees, however, by this time several events
had occurred pertaining to the forthcoming termination
date, July 8, of the existing collective-bargaining agree-
ment.
On February 12, Spaethe, as vice president of White-
Evans Service, sent telegraphic notice to the Union stat-
ing Respondent had learned of the forthcoming negotia-
tion between NEII and the Union and that inasmuch as
it was not a member of NEII, it would not be bound by
any agreement reached unless it specifically agreed to be
bound. On April 16, Stuard sent the Union a letter in
which Respondent requested the commencement of indi-
vidual negotiations for a contract with differences from
the standard agreement . Suggested dates for negotiations
were requested and it was noted that they did not want
to wait until the last minute and be presented with a
"take it or leave it" standard agreement By letter re-
ceived by Respondent April 26, the International replied
noting the termination date and a desire to negotiate a
new contract. It acknowledged the existing negotiations
with NEII and suggested that when they were complete
the local union would submit it to Respondent as an in-
dependent signatory. On May 25, Stuard again wrote as-
serting no reply to his request for negotiations but ac-
knowledging receipt of the Union's "form" letter of
April 23. Asserting a need to know future labor cost for
business planning as soon as possible, it requested negoti-
ations in 5 days. The Union replied on June 4 that it
would be in touch in the near future regarding meeting
dates. Stuard then wrote on June 11 that Respondent had
learned that national negotiations had been suspended
since May 27, and said they had a proposal to share with
the Union and expressed an intention to reach an agree-
ment before the contract expiration without an unneces-
sary work stoppage because of failure to negotiate.
On June 18, Stuard sent his proposal to the Union
with a comment that business planning required that ne-
gotiations be underway prior to expiration of the current
contract Stuard testified that it was his intention that
this serve as notice to the Union that absent an agree-
ment on July 9, the Company intended to implement the
terms of the proposal. During this period Stuard made
numerous local calls to Kenworthy and also called the
International and was told a reply letter was in the mail.
The Union's reply of June 23 stated that Kenworthy and
Regional Representative Harold Smith had been appoint-
ed as the negotiating committee and would be in touch
shortly. Contact was made and Smith suggested July 7
or 8 as a meeting date. Stuard replied it was unaccept-
able and a meeting was arranged for and held on July 2.
Stuard was accompanied by Respondents' counsel and
Smith indicated that, as a result, the Union was not
going to match wits with a lawyer and could not negoti-
ate without legal representation Accordingly, little oc-
curred except an exchange of Respondents' proposals
and the Union's proposal to the NEII
In an attempt to avoid any work stoppage when the
old contract expired on July 5, Kenworthy presented the
Company with a 30-day interim agreement. Stuard, how-
ever, concluded that it would have bound the Company
to whatever terms and conditions were ultimately
reached between NEII and the Union in the new stand-
ard agreement and he therefore refused to sign because
of the Respondents' desire to negotiate an individual con-
tract. Clause 7 of the tendered interim agreement provid-
ed: "The parties hereto agree to be bound by and adhere
to the terms of the new Standard Agreement negotiated
by and between the Union and NEII."
On July 8, Kenworthy again tendered the interim
agreement and Stuard again refused. Between 3 and 8:30
p m. that same day, Kenworthy learned that a new
standard agreement had been reached between NEII and
the International and he called Stuard, said there would
be no strike, and asked if the Company would adopt the
new standard agreement by executing the interim agree-
ment form until the new standard agreement was avail-
able for signature. Stuard again refused and the contract
expired without agreement. No discussions were initiated
by either side to attempt to modify the language in
clause 7 of the interim agreement to allow clear leeway
for further negotiations on an individual basis after the
30-day interim provisions.
Contemporaneously with the above-noted contacts and
negotiations, other events were occurring between Re-
spondents and between White-Evans Service and its em-
ployees. Prior to April, Amco and White-Evans Manu-
facturers began making preparations for what would ulti-
mately be a merger of the two corporations. On April 1,
Amco moved its administrative offices, including clerical
and management personnel, from the Zionsville office to
the facilities of White-Evans Manufacturers in downtown
Indianapolis and the administrative and management
functions of the two corporations were physically
merged When first questioned by the General Counsel,
Applegate acknowledged that the merger had occurred
April 1. Respondent's counsel then interrupted Apple-
gate's testimony to remind him that the merger did not
occur until August 1, the date reflected in the formal
merger agreement Subsequently, however, corporate tax
returns and other documents were evidenced that indi-
cate that the actual transfer of ownership and operations
of service did occur in April. Amco was the surviving
corporation, resulting in Applegate's owning approxi-
mately 80 percent of the stock and Burt Spaethe owning
approximately 20 percent of the stock. Applegate
became president of Amco and Burt Spaethe vice presi-
dent of manufacturing of Amco. Mark Applegate, who
had previously been president of Amco from July 1981
until the time of the merger, became vice president of
construction and continued to manage the construction
division of the business. The Union was not notified of
any change until mid-October 1982, when it was told the
operations of both companies would merge on Novem-
ber 1. Meanwhile, however, during the period between
April 1 and mid-July 1982, Stuard's salary as vice presi-
WHITE-EVANS SERVICE CO. 89
dent of White-Evans Service was paid by Amco without
reimbursement by White-Evans Service, as had been the
prior practice and, in a similar vein, Amco paid for
shared secretarial, sales, accounting and similar services
without reimbursement during this period from White-
Evans.
By memo of February 15, Vice President Spaethe noti-
fied the White-Evans Service employees of his telegram
to the Union regarding negotiations and stated he ex-
pressed a desire to discuss local issues that it "should not
be interpreted as an intention not to sign a new agree-
ment." During mid-May, shortly after Wands, Kirkpat-
rick, and the two helpers had been laid off, Stuard ad-
dressed most of the employees one morning, as they
were all in the shop area to turn in their time records,
and told them that Respondent wanted to go into negoti-
ation with the Union for an individual contract.
Around the June 1, mechanic W. Wallace Carson was
called to Stuard's office. Carson was a 16-year union
member and a highly experienced mechanic who had
worked for Respondents' companies since 1954 and who
previously had been engaged in aspects of elevator
design and manufacture. Stuard mentioned the forthcom-
ing contract expiration and told him that the Company
"was going to operate with or without a contract" and
said that Carson was welcome to stay, but that if he
chose to do so, "there would be some changes made."
When Carson asked what, Stuard declined to answer "at
this time." He stated that he would like Carson's decision
soon.
On June 2, Stuard engaged Raymond Haase in a
lengthy conversation in his office. Stuard began with a
discussion of the Company's efforts to commence negoti-
ations. Haase, a mechanic with 9 years' experience for-
merly was a nonunion Amco employee who had joined
the Union and White-Evans Service in 1981. Stuard told
Haase that he wanted him to know that come July, he
had a job with them if he wanted it, no matter what hap-
pened. When Haase asked, "You mean, when White
Evans goes nonunion?" Stuard did not reply. Haase then
stated that if the Company and Union did not "get things
straightened out" he would not -work for the Company
because he "had waited too long to get into the union,
and I'm not going to give it up now." Stuard asked
Haase to take time to reconsider the matter and the con-
versation ended with a lengthy debate concerning unions
and economics.
On June 4, mechanic Jack Kinz, Respondent's most
senior employee, received a telephone call at a job and
was told to meet Applegate at a nearby truckstop.
During a long conversation, Applegate indicated that the
purpose of his visit was to ask Kinz.to continue working
after the contract's expiration. Kinz replied that he was a
"union man" and would not work without a union con-
tract. Applegate then explained working under a "merit
shop" arrangement and stated that "we are going to
have a better pension and health insurance program ...
than the union program." Kinz asked to see documenta-
tion of the programs but Applegate stated that an actu
ary was still working on them. Applegate also stated
wages would vary between 60 and 100 percent of the
contractual mechanic's rate, wil.h profit sharing, and he
assured him that Kinz would receive top wages. Shortly
before this meeting Kinz had spoken with Jim Trefry of
Trefry Elevator Co., and learned that his business was
being reactivated. The possibility of employment was
discussed and Kinz subsequently was asked if Trefry
could list his name in response to a State of Indiana re-
quest for a listing of personnel to execute their low bid
on a state office contract. He agreed and was listed
(along with Bill Wands), on a letter dated June 3, as
being an employee as of July 1.4
Stuard's interest in finding additional employees con-
tinued ; however, by about June 8, his reason was to not
hire anyone immediately but to have people lined up in
case of a strike after July 8. Two future nonunion em-
ployees, Merrill Bolnder, a so-called class A (100-per-
cent) mechanic, and John Horn a class B (85-percent of
rate) mechanic were contacted and Stuard also placed
ads in newspapers in Cincinnati, Chicago, Louisville, and
New York.
During the middle of June a notice was placed on the
employees' bulletin board stating that White-Evans Serv-
ice would be holding individual negotiations with em-
ployees. As noted, Spaethe previously had notified the
employees of its intention not to be bound by the nation-
al negotiations and Stuard posted Respondents' own pro-
posals . Kinz testified that in view of what was occurring,
during mid-June he concluded that Respondent was no
longer going to be a union shop and he decided to
accept Trefry's employment offer. On June 14, Kinz was
called into Stuard's office and asked to stay after July 8.
Stuard asked Kinz if Applegate had explained "the pro-
gram" to him and Kinz answered yes but indicated that
he did not intend to stay.
The following Monday Stuard instructed Kinz not to
leave the office until he had seen Burt Spaethe. Spaethe
talked to Kinz about the new merit shop program and a
better health, welfare, and pension program, including
profit sharing. Kinz asked to see documentation of the
plans, but Spaethe stated that they were still under de-
velopment by an actuary. Applegate' then came in the
room and asked Kinz to reconsider his decision, assuring
Kinz that were he to work under the "new program" he
would lose no pension benefits in the Union's plan be-
cause his interest was vested. Spaethe then apologized
for the Company's failure to recognize Kinz ' 25th anni-
versary the previous October and made arrangements for
he and his wife to take Kinz and his wife to dinner the
next Saturday. The dinner was held on June 26 at a local
restaurant, Kinz was given a gift, but he informed
Spaethe his decision to leave was final.
4 The low bid was subsequently rejected on the recommendation of
Walter E. Knoop of the State's Public Works Division, because Trefry
allegedly did not supply information saying who its expert repair person
would be. The contract went to the second bidder (Dover Elevator) and
several other pending contracts went to White-Evans Service who was
the second low bidder on other state projects. Knoop testified that he
had recognized the names of Kinz and Wands as they had been his em-
ployees when he was owner of White-Evans Elevator in 1977. Shortly
after he received the letter, on June 3 or 4, 1982, he spoke with Bert
Spaethe, and expressed his surprise that Kmz and Wands were working
for Trefry He subsequently gave Spaethe a copy of the Trefry letter
Under the terms of his sale, Knoop was receiving monthly payments
from White-Evans as of June 1982, as well as at the time of the hearing
90 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Warren had 23 years' experience as a mechanic, in-
cluding 3 years with Amco prior to the creation of
White-Evans Service. Warren had given up union mem-
bership to go with Applegate at Amco and , during the
course of his employment there, had a number of con-
versations with Applegate concerning unions and so-
called merit shops and he considered Applegate to be
definitely against unions . Warren testified that in late
June he was called to Stuard 's office where this conver-
sation took place:
Stuard said:
"Dan, we'd like to have you stay with the new or-
ganization ." And I said, "Steve, you're going non-
union on me, aren't you?" And he says , "we need
control of the men . We don't need to have a union
running our business . I'm going to run the elevator
business from this seat right here." And I said,
"Steve, you 'll never get anybody to go non-union
with you . You won 't get-the men won't go." And
he said, "I've got a desk drawer full of applications
of men that are wiling to go to work non-union."
And I said, "Well, what are you offering?" And he
said "that they were going to have a comparable
plan to our insurance and welfare package and-re-
tirement and everything ." And I said , "how compa-
rable?" And I says, "is it the Amco package, with
the Blue Cross and everything?" And he said,
"yeah, it's the Blue Cross ." And I says, "well, the
Blue Cross and the insurance is good , but the retire-
ment package is a joke."
Warren then recalled how he paid a fine of $2500 to
rejoin the Union when he was transferred from Amco.
As a result of his past experience he felt he could not
trust Applegate and felt he would be "left out in the
cold" if he again went nonunion with Respondent and he
told Stuard he was not going nonunion with him.
Stuard also spoke individually with other employees
including John J . (Jim) Kinz, Jack Kinz' son . Jim Kinz
was a helper and a 10-year member of the Union. About
a week prior to a group meeting at the end of June,
Stuard spoke with Kinz in his office about keeping the
employees abreast of what was happening by posting
correspondence with the Union on the bulletin board and
added that he could not predict the outcome of negotia-
tions, but that "the company had to continue operating
with or without a union" and that Kinz had a job if he
wanted to stay.
In late June Stuard invited all unit members except
Haase, Carson , and Warren to a group meeting in an ad-
jacent office where coffee and donuts were served
during worktime . A second meeting, under similar cir-
cumstances, was held on , July 7 by Applegate in his
office . The stated purpose of the meetings was to apprise
employees of the changes in their working conditions
that would occur after July 8. Stuard did not invite
Haase, Carson, or Warren to either meeting because he
believed from earlier conversations that they would not
work nonunion . The employees were told that Respond-
ent intended to implement health and retirement plans
whose benefits were "equal to or better than " they pres-
ently enjoyed ^ and that Respondent intended to imple-
ment a profit-sharing program (a new benefit). Stuard
also outlined those changes in employee job classifica-
tions and wage rates as contained in the Company's pro-
posal, he informed the employees that overtime premium
pay would be earned only for hours worked in excess of
40 per workweek, and also told them that their maxi-
mum vacation pay would be reduced to 3 weeks.
Stuard testified that one of the purposes of the second
meeting was to introduce the employees to Applegate,
inasmuch as some White-Evans employees knew Apple-
gate only as the owner of Amco . At that time the em-
ployees were unaware of Service 's purchase by Amco.
One employee asked Applegate whether White-Evans
Service would retain its name after July 8; Applegate re-
plied that "They intended to change the name over grad-
ual ... to Amco." Another employee asked for assur-
ance that were the employees to relinquish union repre-
sentation, the Company would not "go union" again at
some future point, causing them to incur union fines to
restore their membership to good standing. Stuard as-
sured them that:
in case the company were sold to someone that
wished to open a union shop , it was entirely possi-
ble for the sales agreement to be fashioned in such a
manner that, as a part of the sale of the Company,
that any problems the employees incurred along the
line would be paid by the new owner or purchaser.
Employees also were told that "no matter what the out-
come of the union negotiations White-Evans would still
be in business and that they would like to have us on
their team." At the second meeting the employees also
were asked to give a decision on staying after the expira-
tion of the contract as soon as possible.
On July 6, Stuard posted a notice reviewing the dates
of communiques and contacts between the Company and
the Union up to and including the meeting of July 2 and
stated that the Union had ignored the Company 's request
to negotiate a separate agreement. On July 6 Stuard also
put a notice on the bulletin board requiring all employees
to turn in all company items (including keys, vehicles,
tools, prints, route sheets, and uniforms) at the close of
business July 8 , "in the event a new labor agreement has
not been reached, or a strike is called." The notice went
on to say that in the event of a strike the Company
would operate on July 9 with replacement personnel and
that those who wished, might report to work at 8 a.m.
when equipment would be reissued.
A union meeting was held July 7, and the earlier meet-
ing between Stuard and Applegate . and the employees
and the equipment turn in notice were discussed , as were
Respondent 's proposals . Also on July 7, Stuard tele-
phoned Carson in the field and explained that Carson
had not been invited to the first group meeting because
Stuard did not believe Carson "would be interested in
what [they] had to offer." The next day Stuard again
telephoned Carson and asked what he "planned on
doing." Carson replied that he did not know. Stuard of-
fered to meet Carson in person at a place of his choice to
discuss Carson's future with the Company . Carson asked
WHITE-EVANS SERVICE CO
Stuard his opinion of him and Stuard stated that "you're
a qualified worker, you're a good worker . . . but you're
not a company man." That evening as Carson returned
his vehicle and equipment to Stuard, Stuard shook hands,
stating, "I hate to do this." (Stuard phoned Carson 2
weeks later and offered him employment, but Carson de-
clined.) Warren returned his equipment and vehicle on
July 8 and Stuard repeated that he wanted Warren to
stay with "the new organization." When Warren asked
what terms the Company was offering, Stuard replied
that he had convinced the "old man" to pay his mechan-
ic union scale. Warren rejected the offer and Stuard
commented, "Well, we're going to make a new start.
White Evans will continue. He said goodbye to
Warren, shook his hand and wished him good luck.
The afternoon of July 8' Jim 1Kinz went to the shop to
see what to do about getting an elevator running in view
of the contract running out. Stuard again told him that
the new pension plan would be better than his present
one. Kinz replied that he did not intend to stay with the
Company but was confused, and would consider staying
if he was guaranteed he would be promoted from helper
to mechanic, assigned a service route, and issued a com-
pany-owned car. Stuard said he would consider that pro-
posal. (Stuard called Kinz at home on July 9 and asked if
he could handle his father's former route. Kinz said he
thought he could but needed a week to think about it.)
As noted above, the national negotiations were suc-
cessfully concluded the afternoon of July 8, however,
the White-Evans Service employees (with the exception
of Cox, who was out of town and had otherwise indicat-
ed to Stuard that he would stay with Respondent and,
apparently, Gaither, who also had an out-of-town route)
turned in their equipment and Stuard declined to enter
into the proferred interim agreement. On July &Stuard
called Merrill Bolinder and told him to report to work
on Monday, July 12.
On July 9, Cox was the only employee who immedi-
ately returned to work. He subsequently was joined by
Gaither, Harty Gehrich, Shepard, Rowland, Farris, and,
for a brief period, Jim Kinz. (All of the latter employees
subsequently were fined under the union constitution for
working .nonunion.) On July 9 an Amco supervisor also
assigned one of their construction mechanics, Kevin Fill-
more, to work for Stuard in servicing elevators. Fillmore
worked without either an Arnco or White-Evans uni-
form. On July 12, Gaither called in and then ran his reg-
ular service route. Bolinder started working as an A me-
chanic. Next, John Horn was hired as a B mechanic, 85
percent.
Subsequent to July 9, Stuard continued to supervise
the service and repair work for customers of White-
Evans; however, the mechanics and helpers were paid
by and considered to be Amco employees. A formal
agreement was made for White-Evans, which now had
no employees, to subcontract the work to Amco. Cus-
tomers were not notified of the change and the Amco
employees used White-Evans' identified cars, uniforms,
and paperwork.
In mid-July, Kinz first told Stuard he would not return
but, near the beginning of August, Kinz informed Stuard
that he would accept Stuard's earlier offer. The two met
91
privately and agreed that Kinz would return to work as
a class "B" mechanic earning 80 percent of the mechan-
ic's scale (10 percent more than his previous wages), re-
ceive a company car, and be assigned his father's route.
When he returned he filled out a new W-4 tax form and
was given an Amco employees' handbook (showing,
among other things, that insurance coverage was differ-
ent than what he previously enjoyed), a new White-
Evans Service ID card, and White-Evans timesheets
(which customers would sign). His paycheck was issued
by Amco. After 3 weeks Kinz voluntarily terminated his
employment. About this same time, Gary Binbow was
hired as a class B mechanic, 80 percent, and two helpers,
Larry Burns and C. J. Edgecomb, were hired. Farris re-
turned in September as a class B mechanic on repair
work (previously he had been a helper).
During the week of July 12, subsequent to the con-
tract expiration and the subcontracting of work to Amco
by White-Evans Service, Kenworthy contacted Stuard
and requested a meeting. Because Respondents' counsel
was out of town the following week, July 28 was select-
ed. At the meeting that was held at counsel's office,
Kenworthy first 'requested a complete instrument of
White-Evans' proposed health and pension plans. Re-
spondent did not have them available but agreed to pro-
vide the documents. The parties discussed one of Re-
spondents' proposal that employees be allotted two 15-
minute breaks per day, but that the ending time of their
shift be extended to accommodate them. The Union did
not want the break and it was agreed their work hours
would not be changed. They discussed other items of the
Union's proposal (Kenworthy as yet had not been noti-
fied of any changes in the new standard agreement)' and
of Respondents' proposal, including a new employee
classification that would provide for a class B mechanic
that would be paid 85 percent of journeyman's scale,
changes in job training, reduction in vacation to a maxi-
mum of 3 weeks, and the elimination of Respondents'
participation in the national industrial education fund,
and a change from Respondents' position discussed on
July 2 relative to control of firing. Kenworthy also told
Stuard that there had been changes in the new agree-
ment for speedier grievance procedures but that he' had
not yet received a copy. Respondent asked Kenworthy if
he was in a position to enter into any agreement other
than the standard agreement and he said he would not be
able to enter into any condition other than what would
be equivalent to the standard agreement. Stuard also
asked that the Union not retaliate against union members
who had worked without a contract and Kenworthy re-
plied that it would be "no problem." The meeting closed
after about an hour and Kenworthy left with the impres-
sion that they would get back together when Respondent
had documents on pensions, etc., available for discussion.
Between July 28 and August 17, Kenworthy tele-
phoned Stuard on two or three occasions to schedule an-
other meeting., His messages went unanswered until
August 18 when Stuard returned a call from Kenworthy
and informed him that he considered further negotiations
a "waste of time," and refused to meet further. Thirty
minutes later Stuard phoned Kenworthy and agreed to a
92 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
subsequent meeting, although repeating his opinion that
further negotiations would be a waste of time because all
Kenworthy had was the standard agreement. Kenworthy
also 'repeated a request for Respondent's pension propos-
als and they agreed on a meeting date of September 14.
Meanwhile, on August 22 or 23, the Union assigned Re-
gional Director Mike Mullett to take over negotiations.
He called Stuard shortly thereafter and arranged a meet-
ing for September 1. Mullett and Stuard, along with their
respective counsels, met for approximately 30 minutes.
Mullett formally withdrew the Union's original proposal
and substituted therefor, terms of the new standard
agreement . Mullett informed Respondent that with the
exception of money figures and benefit plans and a
streamlined grievance procedure, the terms of the new
agreement were basically the same as the old. They dis-
cussed items in Respondents' proposal that included a
proposed change in the Union's so-called Atlantic City
plan, that related to wage formula, and Mullett also
asked for a copy of Respondents' pension and welfare
proposal. Respondents indicated they would get it to the
Union as soon as possible. No concessions were made by
either side, however, the meeting closed on a cordial
basis and the Union indicated they would get back to
Respondents and try to work something out after they
had seen the health, welfare, and pension material.
By letter of September 10, from the Union's counsel to
counsel for the Respondents, the Union acknowledged
the meeting of September 1, noted the Union's position
that the Atlantic City plan should be retained but that it
was waiting to consider Respondents' wage proposal,
and asked for a specific wage proposal, for specific clari-
fications of a number of other proposals, and again
asking for the detailed health, welfare, and pension plans.
The Union sent a followup letter dated September 21, re-
questing a response to the earlier letter along with some
additional questions and it stated that failure to receive a
reply by September 24 would be construed as an unwill-
ingness to engage in good-faith negotiations. After an ex-
change of phone calls on September 22, counsel's office
wrote to the Union acknowledging a change in the re-
quested reply date, due to the incapacity of Respondents'
counsel at that immediate time. On September 27, the
Union, after obtaining the necessary authorization from
the International, began picketing and, on October 6, the
Union's counsel filed a charge with the Board dated Oc-
tober 1, alleging failure to bargain in good faith.
In mid-October Stuard returned a call from Mullett
who told Stuard that the Union would like to see Re-
spondent "back in the fold." Stuard indicated that things
were fine, the men were happy, and that Respondents
were not interested in meeting again . On October 15, Re-
spondents' counsel' wrote the union counsel to inform
him that as a result of White-Evans Service employees'
failure to report to work on July 9 and 12, the Compa-
ny's service work was subcontracted to Amco, that six
former employees were hired by Amco, and that Amco
and White-Evans Service would merge their operations
effective November I. The Union's counsel replied on
November 1 that the Union did not recognize the merger
as changing Respondents' responsibility to bargain in
good faith regarding the elevator employees' terms and
conditions of employment and he renewed his informa-
tion request from the prior letters of September 10 and
21. The Union filed an amended charge on October 27.
Since November 1, no further contract negotiations have
taken place and neither party specifically has informed
the other that they regard negotiations at an impasse.
Discussion
The series of events described above presents the bases
for the charges and contentions of the General Counsel
and the Charging Party. The principal issues are the alter
ego/single employer status of Amco and White-Evans
Service; the legitimacy of the termination of mechanics
Wands, Kirkpatrick, and two helpers; the alleged direct
dealings with employees and bypassing of the Union; the
transfer of work to the alter ego under unilateral changes
in terms of employment; the alleged refusal to bargain in
good faith; and the termination of unit members at the
expiration of the bargaining agreement.
A. Alter Ego Status
Alter ego status generally will be found where two en-
terprises have substantially identical ownership, manage-
ment, business purpose, operation, equipment, customers,
and supervision, see Crawford Door Sales Co., 226 NLRB
1144 (1976), and Custom Mfg. Co., 259 NLRB 614
(1981).
Here, Respondent White-Evans Service subcontracted'-
all its bargaining unit work to Respondent Amco imme-
diately after the expiration of White-Evans' bargaining
agreement with the Union on July 8. Both companies
have been principally owned and controlled by Donald
Applegate and perform separate aspects of related func-
tions, namely the installation and servicing of elevators.
Since the purchase and consolidation of administrative
and managerial functions on April 1, White-Evans Serv-
ice has existed as a wholly owned subsidiary of Amco.
As noted, White-Evans Service was originally estab-
lished to consolidate the elevator service functions that
previously had been performed by its parent, White-
Evans Manufacturers, and Amco after they had come
under Applegate's common ownership and control. In
addition to Applegate, minority owner Burt Spaethe also
has been active in both companies, and both individuals
participated in labor relations matters of White-Evans
Service during the first 6 months of 1982, as evidenced
by their direct communcations with employees, despite
the asserted primary responsibility for these functions
being assigned to Steven Stuard.
Stuard, as vice president of White-Evans, was paid by
Amco after April 1, without reimbursement from White-
Evans Service. Also, during June, while still operating
White-Evans, Stuard recruited additional employees, at
least two of which were hired by Amco immediately
after a subcontracting arrangement began between the
companies . Stuard supervised the service and repair me-
chanics under both arrangements, including one regular
Amco employee who was told by an Amco supervisor
to report to Stuard on July 9. The new subcontracting
operations conducted by Amco are substantially identical,
to the service and repair function of White-Evans. More-
WHITE-EVANS SERVICE CO.
over, customers were not notified of any change, many
of the mechanics were the same, and equipment, uni-
forims, and paperwork were still identified as White-
Evans.
On brief Respondents admit that Amco and White-
Evans might have constituted a single employer at the
time the union contract expired, but contend that Amco
is not an alter ego liable for the bargaining obligations of
the other because it is not a disguised continuance at-
tempting to avoid that obligation. Here, Respondent ac-
curately contends that Amco was not created for a nonle-
gitimate business purpose or to evade the labor obliga-
tions of White-Evans, however, when it is viewed in the
light of the demonstrated alleged unfair labor practices
and misdirected negotiations, the immediate subcontract-
ing arrangement between the two related companies ap-
pears to be tainted with that very purpose. Although
alter ego cases have generally involved situations where
a new entity has been created, the mere fact that Apple-
gate already owned and controlled a nonunion company
that conveniently could be used through the device of a
subcontracting arrangement for the purpose of continu-
ing the activities of White-Evans after its bargaining
agreement with the Union expired does not provide a le-
gitimate business rationale for the transfer of operations
to another entity. I find that the subcontracting arrange-
ment is analogous to the lease agreement involved in the
alter ego situation found to exist in Denzil S. Alkire, 259
NLRB 1323 (1982), and, accordingly, I find that under
the circumstances noted above, Amco is an alter ego of
White-Evans Service and is derivatively liable to provide
any remedies ordered by the Board, including backpay
due discriminatees, see Crawford Door and Custom Mfg.,
supra.
In addition, the record shows that Respondents' princi-
pal owner was predisposed, even at the time White-
Evans Service was created in 11980, to operate as a non-
union shop. White-Evans Service was allowed to operate
with adoption,of the union agreement in order to retain
the valued union employees that were transferred from
White-Evans Manufacturers; however, it appears that
this was done in anticipation of future changes when the
bargaining agreement expired in 1982. Respondents' su-
pervisors, especially Stuard, were well aware of the his-
torical traditions in the elevator industry of the use of a
basic "Standard Agreement" with local options. Howev-
er, in early 1982, White-Evans indicated it would not be
bound by the forthcoming, national negotiations and in
April it requested separate negotiations for an individual
agreement. At the same time, management, however, had
arranged for the merger of White-Evans Service parent
corporation into Amco. Some physical aspects of the
merger took place in April, including mergers of admin-
istrative and managerial functions and consolidation of fi-
nancial and tax matters. The formal merger agreement
reflected an effective date of August 1, approximately 3
weeks after the expiration of the existing bargaining
agreement with the Union. During this same period,
management also chose to lay off two of the most active
and vocal union supporters and it began the other activi-
ties found in this decision to constitute'unfair labor prac-
tices.
93
Under these circumstances, I find that the record also
supports the inference that Respondents planned to take
whatever advantage they could of the opportunity pre-
sented by the expiration of the White-Evans Service bar-
gaining agreement with the Union, to use that opportuni-
ty to attempt to avoid a contract with the Union, and to
facilitate the merger of the White-Evans operations with
Amco on a nonunion basis. Accordingly, I also find that
alter ego status has been established here because the
subcontracting of White-Evans work to Amco contem-
poraneously with the merger of the separate entities in
effect makes use of a disguised continuance in an attempt
to avoid collective-bargaining obligations.
B. Termination of Wands and Kirkpatrick
Service mechanics Wands and Kirkpatrick were two
of Respondents' most senior employees and were well
known by the owner and supervisors alike to be such
strong union supporters as to be referred to as "assistant
business agents." The record also shows that their con-
sistent efforts to obtain what they perceived to be adher-
ence to the bargaining agreement earned them the dis-
pleasure of management. Credible testimony by former
Supervisor Yager and employees Warren and Jack Kinz
shows that principal owner Applegate previously had
ended union recognition at Amco, had favored going
nonunion when White-Evans Service was formed, had
expressed his opinion of Wands and Kirkpatrick as "trou-
blemakers" in relation to their checking them with the
Union, and, prior to the expiration of the then existing 5-
year bargaining agreement, had extolled the prospect of
changing to a "merit shop" nonunion operation. Supervi-
sor Stuard, in addition to derisively referring to Wands
and Kirkpatrick as "assistant B A's," told Warren that
the Respondents did not "need to have a union running
our business," told Jim Kinz the Respondents would op-
erate "with or without a union," and otherwise specifi-
cally excluded known union supporters Carson, Haase,
and Warren from group meetings held with other em-
ployees.
Accordingly, I conclude that Respondents had knowl-
edge of consistent union activities by Wands and Kirk-
patrick and held overall feelings of antiunion animus that
were directed especially at these employees. The record
further shows that their activities and the Respondents'
animosities continued during the early months of 1982 at
the same time Respondents were pursuing a plan to
avoid being bound by the industrywide standard agree-
ment then under negotiation. Wands and Kirkpatrick
were then laid off on April 30 and, under the circum-
stances, I conclude that the General Counsel has met her
initial burden in a case of this nature by presenting a
prima facie showing sufficient to support an inference
that the employees' union activities were the motivating
factor in Respondents' decision. Accordingly, the testi-
mony will be discussed and the record evaluated in keep-
ing with the criteria set forth in Wright Line, 251 NLRB
1083 (1980); see NLRB v. Transportation Management
Corp., 462 U.S. 393 (1983), to consider Respondents' de-
fense and in the light thereof, whether the General
Counsel has carried his overall burden.
94 . DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Respondents contend that Wands and Kirkpatrick
were laid off because of a decline in repair work and be-
cause they were mechanics with poor work performance
in relation to job cleanliness , maintenance , job effort, and
account retention . Stuard asserts personal responsibility
for this decision, as well as the decision to transfer two
repair mechanics to the vacated service routes and to lay
off two repair helpers. Respondents further contend that
their failure to recall Wands and Kirkpatrick while oth-
erwise seeking mechanics was justified by their poor
work performance and history of insubordination.
Here, I find Respondents' principal reason for the
layoff to be pretextual. Although Respondents presented
evidence suggesting they had fewer repair orders during
the previous 4 to 6 weeks and showing that financial
records indicated a 24-percent decrease in repair income
between the first quarter of 1982 and the last quarter
1981, there is no indication that Stuard was aware of or
relied on the latter information. Moreover, comparison
of the same quarters in the previous year show a 44-per-
cent decline and no employee layoffs. In 1982, however,
the expiration of the bargaining agreement was fast ap-
proaching and Respondent was in the process of merging
its Amco and White-Evans operations and in attempting
to either negotiate a contract independent of the histori-
cal standard agreement or to change to a nonunion shop.
Wands and Kirkpatrick were the two most notorious
union activists and I conclude that the disbanding of two
repair teams and the selection of two service mechanics
for layoff was motivated by Respondents' desire to set
the stage for their desired change to a nounion operation
at the expiration of the bargaining agreement.
The pretextual nature of the asserted repair work
excuse is amplified by the credited testimony of mechan-
ic Warren (consistent with the general nature of his sev-
eral conversations with Stuard and the fact that Stuard's
brother was Warren's helper), that on April 30, Stuard
admitted to Warren that they had a bunch of (repair)
work but the "old man" said Wands and Kirkpatrick had
to go. From this, and the other factors noted below, I
also conclude that Respondents had no intention of re-
calling Wands and Kirkpatrick regardless of the amount
of available work. This conclusion also is reinforced by
the showing that Stuard had actually hired two repair
mechanics during the time he said he had observed a de-
cline in work. Also it is shown that some repair work is
elective and is scheduled or classified at Stuard's discre-
tion. Moreover, within 3 weeks of the layoff Stuard
asked employees if they knew of any available service
mechanics and then told employees who suggested
Wands and Kirkpatrick were available that he did not
need any more business agents around . Gehrich, who
was on Wands' old service route, then quit and Stuard
asked Business Agent Kenworthy for the names of avail-
able mechanics . He was given six names including
Wands and Kirkpatrick, but declined to hire anyone and
shortly thereafter began placing ads for elevator mechan-
ics in out-of-town newspapers.
I find that Respondents' other reasons, relating to poor
performance and insubordination, for the layoff selection
of Wand and Kirkpatrick to be in the nature of a shifting
rationale and also to be without legitimate justification.
Both mechanics are' shown to have been senior, experi-
enced, skillful mechanics. Problems did arise, and I infer
that Wands and Kirkpatrick, intentionally or unintention-
ally, reacted to the cutdown in the time allowance for
each service call that occurred after the settlement of the
lawsuit in September 1981, by putting off some aspects
of their work, most specifically cleaning. However, it
does not appear that termination would be justified as a
remedy for their conduct nor does it appear that they
were any worse than all but the most conscious employ-
ees and no others were penalized for poor performance.
They were not otherwise disciplined for any • transgres-
sions (except for the letter to Kirkpatrick dated February
5, 1982, precipitated by his leaving work during a snow
emergency), and I conclude that the asserted insubordi-
nation related most directly to their protected conduct of
going by the contract rather than to any direct refusal to
ultimately follow orders. Finally, Wands and Kirkpatrick
themselves were not given any reason for their termina-
tion other than that of being laid off because of a decline
in work.
In summation, I find Respondents' reasons for the
layoff and failure to recall Wands and Kirkpatrick to be
pretextual, shifting, and without basis or rationale and I
further conclude that the preponderance of the evidence
shows that the termination of Wands and Kirkpatrick
(and the related layoff of Farris and Brian Stuard) was
motivated by Respondents' antiunion animosity, their
knowledge of Wands' and Kirkpatrick's strong union ac-
tivism, and their desire to make a change in the status of
White-Evans Service as a union shop. I therefore con-
clude that the General Counsel has satisfied his overall
burden of proof, and I find that Respondents are shown
to have violated Section 8(a)(1) and (3) of the Act as al-
leged.
C. Direct Dealings with Employees
During early June, the Respondent and the Union ex-
changed correspondence and telephone contacts pertain-
ing to the forthcoming expiration of the bargaining
agreement on July 8. At the same time, owner Applegate
met senior mechanic Jack Kinz away from the office
while Vice President Stuard called employees Carson
and Haase to his office. In each instance, as set forth in
detail above, they were told or it was implied that
changes were anticipated after July 8, Kinz was told of
benefits he would receive under a "merit-shop" oper-
ation, and they were asked their intentions about staying
if there was no union contract. Repeated conversations
of a similar nature were directed at Kinz by Stuard and
Vice President Spaethe, with an official inducement of
better pension and health benefits and a new profit-shar-
ing plan. Later in June Kinz was given a dinner and gift
by the Company some 9 months after his 25th anniversa-
ry, and his son, Jim Kinz, was called to Stuard's office,
told the Company would continue to operate with or
without a union, and was assured of a job.
Subsequently, Jim Kinz was offered his father's service
route, a car, and a 10-percent salary increase. Warren
also was called individually to Stuard's office, told they
would like him to stay with the new organization, and
WHITE-EVANS SERVICE CO. 95
offered "comparable" benefits. Then, group meetings
were held (where Carson, Haase, and Warren were not
invited because Stuard believed from his earlier conver-
sations that they would not work nonunion), and the em-
ployees were told by Stuard and Applegate that changes
were intended after July 8, that would provide a new
profit-sharing program and health and retirement plans
equal to or better than those presently enjoyed, and new
job classifications and wage rates. They also were told
that it was possible to make arrangements for the pay-
ment of potential union fines for going nonunion if the
Company was sold at some future time. The employees
also were asked to give a decision about staying as soon
as possible. Also, Carson was called and asked what he
planned to do.
The Respondents assert that the group meetings with
employees were merely to provide information regarding
the Company's proposal submitted to the Union on June
18, and that there was no intent to institute the proposals
prior to first negotiating them with the Union. The
group meetings, however, took place after Respondent
had direct dealings with individual employees and the
Company specifically told the group that it intended to
implement the planned changes, without mention of any
disclaimer regarding union negotiations. In this context,
it appears that Respondent clearly intended to make
changes regardless of any negotiations with the Union. It
is well established that direct dealings with employees
tend to undermine a union 's status as exclusive represent-
ative and to inhibit parties from reaching agreement, see
Tarlas Meat Co., 239 NLRB 1400 (1979), Here, it appears
that Respondents' anticipation that it could successfully
bypass the Union may have led to that very result. Re-
spondents offered benefits to employees and tried to per-
suade them to accept them regardless of the outcome of
negotiations with the Union. This occurred while negoti-
ations with the Union were pending and continued while
the Company and Union actually had a meeting on July
2 and while on July 5 and 8 when the Union proffered
an interim agreement.
The offer of benefits under the circumstances shown
here clearly was designed to induce the employees to
abandon their support of the Union and it therefore is a
violation of Section 8(a)(1) of the Act. Moreover, I find
that the repeated requests, generally made in Stuard's
office, that employees let the Company know if they de-
cided to work after the expiration of the contract,
viewed in connection with the direct dealings, is inher-
ently coercive in nature and therefore constitutes unlaw-,
ful interrogation in violation of Section 8(a)(1) of the
Act. The individual and group meetings between Re-
spondents and employees discussed herein show that Re-
spondents bargained directly with the employees con-
cerning terms and conditions of employment at a time
when they were engaged in bargaining with the Union
concerning a new contract and, accordingly, I conclude
that Respondents are shown Lo have violated Section
8(a)(1) and (5) of the Act as alleged. See Tarlas Meat,
supra, and Marquis Elevator Co., 217 NLRB 461 (1975),
and C. K. Smith & Co., 227 NLRB 1061 (1977).
D. Termination of Unit Members
After Wands and Kirkpatrick were terminated on
April 30, mechanic Gehrich voluntarily quit on May 23,
and senior mechanic Kinz learned of a job opportunity at
Trefry Elevator Co., shortly thereafter. Kinz credibly
testified that he became interested in the job because of
his concern over the termination of Wands and Kirkpat-
rick, his impression that White-Evans intended to go
nonunion , and his personal convictions as a "union man."
With his consent, he was listed as a future employee on a
Trefry listing of personnel sent to the State of Indiana on
June 3. The state official who received the letter on June
3 or 4 was a former owner of White-Evans with continu-
ing financial ties with the Company and I fmd that he
promptly told Respondents' official Spaethe about the
letter. This was relayed to Applegate who immediately
contacted Kinz near a jobsite and attempted to persuade
Kinz to stay after the expiration of the bargaining agree-
ment. At the same time, the state official recommended
to his superior that Kinz' potential employer be disquali-
fied. The recommendation was followed; however, there
is no indication that Kinz learned that his potential em-
ployer would not be receiving state contracts and he
went forward with his plan and resigned from Respond-
ents effective June 30.
The General Counsel urges that Kinz was construc-
tively discharged because he quit in response to Re-
spondents' planned "intolerable" changes in working
conditions and the attendant relinquishment of union rep-
resentation. Respondents contend that Kinz quit volun-
tarily and had decided to do so prior to June 3, as evi-
denced by the list of his name in a letter of that date by
his prospective new employer.
Here, I infer that Kinz would have stayed with White-
Evans through July 8 were it not for his unawareness
that it had been recommended that his potential employ-
er be disqualified from its low bids on several state jobs.
I also find a strong appearance of impropriety in the dis-
closure of seemingly confidential information by a state
official to Respondents, in the official's financial relation-
ship with Respondents, and in his recommendation to the
State which could benefit Respondents. I find that Re-
spondents' participation, directly or indirectly, in the use
of this information regarding Kinz' future employment
status, contributed to his decision to resign effective June
30, and that were it not for Respondents' actions, he
would have been in the same position as the other em-
ployees who were still working when the contract ex-
pired. Respondents should not be permitted to benefit
from their improper actions (in effect using confidential
information as a prelude to their illegal direct dealings
and offering of benefits to Kinz) to avoid their responsi-
bilities under the Act and, accordingly, I find that Kinz
falls into the same category as the other employees
working on July 8 for purposes of evaluating his con-
structive discharge status.
As already discussed, in the month prior to the expira-
tion of the existing contract, the Respondents "laid off
the two most active union supporters and failed to recall
them, despite an apparent shortage of personnel and Vice
President Stuard's expressed interest in hiring additional
96 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
mechanics. Respondents then engaged in direct negotia-
tions with employees during which they offered benefits
to employees who would continue to work under chang-
ing conditions and without a union contract, including
the implied promises that possible union fines for work-
mg nonunion could be paid for by any successor union
employer. At the same time, employees with known,
strong union sympathies were excluded from Respond-
ents' meetings with other employees and while the work-
ers were interrogated as to their decisions regarding con-
tinued employment. Finally, Respondents put up a notice
requiring all employees to turn in their keys, vehicles,
tools, uniforms, and paperwork concurrently with the ex-
piration of the contract.
Under these circumstances, I conclude that the unit
members were given the choice of not reporting to work
or continued employment conditioned on acceptance of
changed terms and conditions of employment and aban-
donment of union representation, a right guaranteed
them under Section 7 of the Act. The Union did not call
a strike at that time and, accordingly, the record clearly
supports the finding that the Respondents were responsi-
ble for the employees' termination and that the unit em-
ployees were constructively discharged on July 8 be-
cause they declined to relinquish rights guaranteed them
under the Act. See Columbia Engineers International, 249
NLRB 1023 (1980), and Marquis Elevator and Crawford
Door, supra. I therefore conclude that the Respondents
are shown to have terminated all employees on July 8, in
violation of Section 8(a)(1) and (3) of the Act, as alleged.
E. Unilateral Changes and Good-Faith Bargaining
An employer is not free to unilaterally change terms
and conditions of employment after the expiration of a
contract unless impasse in negotiations has been reached.
Here, the record shows that after the contract expiration
date, the Respondents ceased contributions to the union-
negotiated fringe benefit plans and instituted its' own
health and welfare plan and pension plan while also uni-
laterally changing numerous terms and conditions of em-
ployment such as overtime, wage scales, vacations, and
job classifications, all changes that were contained in the
bargaining proposals given to the Union. And, as noted
by the Charging Party, other than by the contract pro-
posals themselves, Respondent did not notify the Union
that it intended to change any term or condition, that it
was discontinuing contributions to the union fringe bene-
fit funds, or that it considered negotiations at an impasse.
The Respondents, citing R. A. Hatch Co., 263 NLRB
1221 (1982), contend that they gave the Union every op-
portunity to negotiate an individual contract, while the
Union delayed any negotiations and then insisted on the
terms of the standard agreement, forcing an impasse, and
that it therefore had the right to institute the terms of its
proposal upon expiration of the contract on July 8. In
Hatch the union had insisted on the employer's execution
of a standard, areawide agreement. In the instant case,
the Local Union offered a 30-day interim agreement on
July 5 and 8 while the national negotiations were still un-
derway and a second time qn July 8, after it was learned
that a new standard agreement had been reached. Al-
though the interim agreement contained a clause offen-
sive to Respondents in that it tied it into the standard
agreement, it was possible for the parties to have negoti-
ated a modification of that language, however, no party
raised that alternative. No strike was called by the Union
and Business Agent Kenworthy credibly testified that his
purpose in offering the interim agreement was to avoid a
work stoppage. It also appears that he anticipated contin-
ued negotiations with the Company. And, although it is
shown that the immediate parties to the negotiations
were unaware of historical variation from the standard
agreement by the Union, it is oberved that the old con-
tract expired at a time when new aspects of concession-
type bargaining were becoming practical and the Com-
pany was aware that, at a minimum, it was possible to
negotiate local options with the Union.
In its decision in Taft Broadcasting Co., 163 NLRB
475, 478 (1967), the Board has described a bargaining im-
passe as follows;
Whether a bargaining impasse exists is a matter of
judgment. The bargaining history, the good faith of
the parties in negotiations, the length of the negotia-
tions, the importance of the issue or issues as to
which there is disagreement, the contemporaneous
understanding of the parties as to the state of nego-
tiations are all relevant factors to be considered in
deciding whether an impasse in bargaining existed.
The court of appeals in the same case went on to com-
ment that a finding of impasse reflects that there is no
realistic possibility that continuation of discussion at that
time would be fruitful, that the prospects of reaching an
agreement had been exhausted, and that the Company
had discharged its statutory obligation to conduct full
and fair discussion with the Union.
Here, I conclude that the facts are distinguishable from
those in Hatch, supra, and that the timing and circum-
stances surrounding the Union's presentation of the inter-
im agreement falls short of conclusive insistence on Re-
spondents' capitulation to the terms of the standard
agreement. At the time the interim agreement was of-
fered by the Union, no substantial local negotiations had
yet taken place, there was no history of difficult negotia-
tions between the parties, the Union had responded to
the Company's request for independent negotiations and
had never indicated that the Union would be unwilling
to enter into negotiations and agreement with a separate
employer, and no strike had been called. And, although
it is likely that Respondents could have been frustrated
by the Union's apparent reluctance to negotiate locally
while the national negotiations were taking place, no per-
suasive justification is shown to warrant the conclusion
that the Company could reasonably believe that it had
thoroughly exhausted the prospects of reaching an agree-
ment. I therefore conclude that, as of July 8, no impasse
had occurred. Accordingly, I conclude that Respondents
breached their obligation to bargain in good faith by
making unilateral changes in existing terms and condi-
tions of employment subject to mandatory bargaining, in
violation of Section 8(a)(1) and (5) of the Act as alleged.
It also is concluded that Respondents otherwise cannot
claim that impasse justifies unilateral changes inasmuch
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WHITE-EVANS SERVICE CO.
as they are shown to have contemporaneously engaged
in unfair labor practices, including direct dealings with
employees, which precluded the possibility of a genuine
impasse, see Akron Novelty Mfg. Co., 224 NLRB 998,
1002 (1976). Moreover, after the weekend following the
contract's expiration, the Union sought to continue nego-
tiations and,' although talks were delayed, this time by
the Company, they did resume and I find that negotia-
tions did continue on July 28 and September 1, thereby
further negating Respondents' claim of impasse on July
8. Also, during the July 28 meeting, agreement was
reached that one of Respondents' proposals, regarding a
change in hours to include two break periods, would not
be made and the regular schedule of work hours would
not be altered. At Respondents' request the Union also
agreed at that point in time that it would not retaliate
against union members that had worked without a con-
tract. During the September 1 meeting the Union was
represented by a new national negotiator and counsel
and it substituted the terms of the new standard agree-
ment as its proposal. No concessions were made but the
Respondents indicated they would respond to the
Union's continued request for pension and welfare infor-
mation as soon as possible. The Union again requested
the pension ,and welfare information in late September
and when no compliance was made, the Union obtained
authorization for picketing and filed charges with the
Board on October 1. After a contact from the Union in
mid-October, Respondents replied they were not interest-
ed in further meetings. However, the Union made one
last request for information on November 1, which con-
cluded contacts between the parties.
The total sequence of events shown on this record in-
dicates a pattern of conduct designed first to undermine
the Union's status, and then to impede the possibility of a
bargaining agreement. Thus, following the undisclosed
merger of the involved alter egos, the termination of the
two most active union supporters, and direct dealings
with employees during which they were solicited to
work nonunion, the , Respondents ceased making contri-
butions to the contractual benefits funds, terminated all
unit members, and thereafter conditioned reemployment
of unit members on their acceptance of unilaterally
changed terms. Moreover, the credited testimony of
former President Yeager clearly indicates that owner
Applegate harbored a desire to make Respondents' eleva-
tor service operations nonunion at the expiration of the
existing contract and, thereafter, Vice President Stuard
expressed his view that continued negotiations were a
waste of time.
Even when an attempt to continue negotiations was
being pursued, White-Evans Service subcontracted its
entire operation to Amco. As otherwise discussed, this
was done between two companies who were alter egos
of one another at a time when their true relationship had
not been fully disclosed to the Union or public. Thus, the
subcontracting constitutes a fictional transfer of work to
a disguised continuance in an attempt to avoid collective
bargaining obligations and violates Section 8(a)(5) of the
Act as alleged. This, combined with Respondents repeat-
ed lack of response to the Union's request that it be pro-
vided relevant information regarding terms and condi-
97
tions of their contract proposals, is indicative of a lack of
good-faith bargaining and I conclude that under all these
circumstances Respondents are shown to have violated
Section 8(a)(1) and (5) of the Act, as alleged.
CONCLUSIONS OF LAW
1. Respondents are an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. White-Evans Service Co., Inc. and Amco Elevators,
Inc. are alter egos of one another and are affiliated busi-
nesses that constitute a single-integrated business and the
latter is obligated to remedy the unfair labor practices of
the former.
3. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
4. By laying off employees William Wands and James
Kirkpatrick Jr. on April 30, 1982, Respondents engaged
in unfair labor practices in violation of Section 8(a)(1)
and (3) of the Act.
5. By bargaining directly and unilaterally with employ-
ees in regard to wages, benefits, and working conditions,
Respondents violated Section 8(a)(1) and (5) of the Act.
6. By interrogating employees regarding their union
support, asking for their decision as to whether they
would work after the union contract expired, and offer-
ing benefits if the employees abandoned union support
and membership and worked without a union contract
Respondents violated Section 8(a)(1) of the Act.
7. By unilaterally imposing illegal conditions of contin-
ued employment or reemployment on and after the expi-
ration of the bargaining agreement on July 9, 1982, an
abandonment of union representation and acceptance of
unilateral changes in terms and conditions of employ-
ment, Respondents constructively terminated employees
in violation of Section 8(a)(1) and (3) of the Act.
8. By ceasing to make contractual contributions to the
Union's pension, health and educational trust funds after
July 8 and thereafter unilaterally implementing the terms
of Respondents contract proposal to the Union without
impasse or agreement, Respondents violated Section
8(a)(1) and (5) of the Act.
9. By subcontracting the entire White-Evans Service
operation to Amco, by failing to furnish the Union with
requested documentation of their contract proposals
dealing with pension and health programs, wage rates,
and travel expense reimbursement and negotiating with
the Union with no intention of reaching an agreement
Respondents violated Section 8(a)(1) and (5) of the Act.
10. A bargaining order is necessary to remedy Re-
spondents' unfair labor practices.
REMEDY
Having found that the Respondents have engaged in
certain unfair labor practices , I find it necessary to order
it to cease and desist and to take certain affirmative
action designed to effectuate the policies of the Act.
Respondents having discriminatorily discharged all
employees, it must offer them reinstatement and make
them whole for any loss of earnings and other benefits,
computed on a quarterly basis from date of discharge to
date of proper offer of reinstatement less any net interim
98 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
earnings, as prescribed in F. W. Woolworth Co., 90
NLRB 289 (1950), plus interest as computed in Florida
Steel Corp., 231 NLRB 651 (1977). Those employees sub-
sequently rehired by Respondent Amco shall be compen-
sated for any intervening loss of pay or other benefits.
Additionally, Respondents must make appropriate pay-
ments to the Union's benefit funds in accordance with
Merryweather Optical Co., 240 NLRB 1213, 1216 fn. 7
(1979), and because the serious nature of the violations
demonstrate a general disregard for the Union's status as
exclusive bargaining representative and for the employ-
ees' fundamental rights, I find it necessary to issue a
broad order requiring the Respondents to bargain with
the Union and to cease and desist from infringing in any
other manner on rights guaranteed employees by Section
7 of the Act. Hickmott Foods, 242 NLRB 1357 (1979).
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
s
ORDER
The Respondents , White-Evans Service Co., Inc. and
Amco Elevators, Inc., Indianapolis , Indiana, their offi-
cers, agents , successors, and assigns, shall
1. Cease and desist from
(a) Discharging or otherwise discriminating against
any employee for supporting International Union of Ele-
vator Constructors , AFL-CIO or any other union.
(b) Failing or refusing, on request, to furnish the
Union with documentation of their contract proposals or
to bargain collectively with the labor organization as the
exclusive collective-bargaining representative of the em-
ployees in the bargaining unit.
(c) Unilaterally changing the wages and other terms
and conditions of employment of the employees in the
unit without prior consultation with the labor organiza-
tion as the exclusive collective-bargaining representative
of the employees.
(d) Bargaining directly and individually with any em-
ployee in the bargaining unit.
(e) Requiring as conditions of continued employment
or reemployment that employees abandon union repre-
sentation and accept unilateral changes in terms and con-
ditions of employment.
(f) Interrogating employees concerning whether they
would work without the Union and offering benefits to
induce employees to abandon union support and mem-
bership and work without a union contract.
(g) Failing and refusing to make required contributions
to the union pension, health, and educational trust fund
as required by the collective-bargaining agreement be-
tween the Company and the Union.
(h) In any other manner interfering with , restraining;
or coercing employees in the exercise of the rights guar-
anteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain with the Union as the exclusive
representative of the employees in the appropriate unit
concerning terms and conditions of employment and, if
an understanding is reached, embody the understanding
in a signed agreement.
(b) Offer W. Wallace Carson, Raymond Haase, Jack
C. Kinz, James Kirkpatrick, Jr., Brian Stuard, William
Wands, and Daniel C. Warren immediate and full rein-
statement to their former jobs or, if those jobs no longer
exist, to substantially equivalent positions, without preju-
dice to their seniority or any other rights or privileges
previously enjoyed, and make them whole for any loss of
earnings and other benefits suffered as a result of the dis-
crimination against them, in the manner set forth in the
remedy section of the decision.
(c) Make whole employees Steven L. Shepherd,
Sidney Gaither, Harry L. Gehrich, Franklin Carl Cox,
Donald H. Rowland, and John J. Kinz for any loss of
earnings they have incurred as a result of their termina-
tions on July 9, and Frank Ferris for his termination on
April 30, to the date of their subsequent employment by
Amco, for any loss of earnings and other benefits suf-
fered as a result of the discrimination against them, as set
forth in the remedy section.
(d) Remove from its files any reference to the unlaw-
ful discharges and notify the employees in writing that
this has been done and that the discharges will not be
used against them in any way.
(e) Restore and place in effect all terms and conditions
of employment provided by the contract of July 8, 1982,
which were unilaterally changed by the Respondents,
except in such particulars as the Union may request that
a particular change not be revoked.
(f) Make such pension, welfare, and educational pay-
ments on behalf of those employees in the unit for whom
contributions were previously made and would have
continued to be made had the Respondents not ceased to
comply with the contract.
(g) Preserve and, on request, make available to the
Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records nec-
essary to analyze the amount of backpay due under the
terms of this Order.
(h) Post at its Indianapolis, Indiana facility, copies of
the attached notice marked "Appendix."6 Copies of the
notice, on forms provided by the Regional Director for
Region 25, after being signed by the Respondent's au-
thorized representative, shall be posted by the Respond-
ents immediately upon receipt and maintained for 60
consecutive days in conspicuous places including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respond-
5 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
6 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
WHITE-EVANS SERVICE CO. 99
ent to ensure that the -notices are riot altered , defaced , or (i) Notify the Regional Director in writing within-20
covered by any other material. days from the date of this Order what steps the Re-
spondent has taken to comply.